Just how will the finance function operate differently in 2025? Consequently, the best way for finance to get ready to implement any and all transformational technologies is to work toward mastering its ability to analyze data. The temptation for managers as they implement an automation … Anton Sher, Principal is Finance Strategy & Transformation Leader, Deloitte Consulting LLP. Finance 2025. Finance 2025: “Work” implications for the future finance function Published on October 2, 2018 October 2, 2018 • 79 Likes • 1 Comments Whatever future you’re planning for, know that the journey could feel like a roller coaster. They’ll need to hone their leadership skills, adjusting to managing a diverse group of employees in different geographies. As the saying goes, “It’s tough to make predictions, especially about the future.”. They may feel like things aren’t broken, so why go through the pain of disruptive change? CFOs and Finance leaders often struggle to make sense of the many trends that impact their finance function … … New technologies, in addition to familiar ones that have taken on new forms (see sidebar, “Familiar terms, changed meanings”), will lead to dramatic organizational shifts. Morristown, NJ 07960, Follow on LinkedIn | Like on Facebook Not long ago, cloud, mobile, and Big Data seemed to be joined in a giant wave; now, cognitive technologies, blockchain, and advanced analytics appear to occupy the same spot on the horizon. Deloitte CFO Insights are developed with the guidance of Dr. Ajit Kambil, global research director, CFO Program, Deloitte LLP; and Lori Calabro, senior manager, CFO Education & Events, Deloitte LLP. … Finance 2025. Meanwhile, … They also need to get comfortable with the idea of leading people with skill sets they may not understand. CFO Insights, a bi-weekly thought leadership series, provides an easily digestible and regular stream of perspectives on the challenges you are confronted with. People and machines working together in new ways. Today’s CFOs are responsible for much more than finance. A shift to touchless transactions will transform operations as technologies like blockchain and AI reach deeper into finance. They still have to find ways to keep the current business growing—even as they are leading the charge to reinvent it. A podcast by our professionals who share a sneak peek at life inside Deloitte. Deloitte Consulting LLP. Please enable JavaScript to view the site. Executing on that awareness requires CFOs to take on difficult tasks, such as aligning their functions with the company’s overall strategy and acquiring the talent that will enable them to fulfill their ambitions. DTTL and each of its member firms are legally separate and independent entities. The business value added by blockchain will surpass $176 billion by 2025 and $3.1 trillion by 2030. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. Finance teams are under pressure to be partners in business strategy and operations, as well as … They should also consider how they can digitize the finance function by implementing cutting-edge technologies (such as blockchain) to decrease costs and increase insights. Finance consulting services. Additionally, they also need to be strategically selective, balancing leading-edge technologies with those of sufficient maturity to perform reliably. … Are you ready? Finance has already changed a lot from its days as an accounting/back-office function … We help you capitalize on opportunities to drive profitable growth, rethink organizational structure and reap the potential of information. CFOs who want to restructure their talent models, for example, may need several years to work through that transformation. Leading finance departments are guardians of enterprise value creation, demonstrating stewardship of their own spend by lowering absolute costs and shifting work towards more value-added activities. But CFOs can’t prepare to make that leap without first gaining a solid understanding of what underlying technological shifts are necessitating the transition. Real-time processing may push finance organizations to become flatter and more agile, designing and driving change throughout the business. But while each individual technology will advance within the next five years, they won’t simultaneously arrive at the point where they can contribute to the finance function’s ability to create value. Advances in digital technologies and changing workforce trends are causing CFOs to consider how the finance function might evolve over the next several years, and how they can help their finance organizations adapt and become more digitally driven. It is now time for us to reflect on … For many companies, leveraging analytics is key to remaining competitive. The finance function must disrupt itself to meet the demands of its customers, including regulators, corporate boards, sales and marketing departments, suppliers, and internal and external auditors. Those same technologies promise to fundamentally change the role of the CFO, as well. Several forces will reshape the way finance will be organized in seven to 10 years. What follows is a handful of predictions about how the finance function of the not-so-distant future might be organized, the activities it could perform, and how it might further evolve. Given their insight into business drivers, CFOs can evaluate investments using that lens. By weighing the potential and power in mixing such foundational technologies to drive value—with increasing efficiency, as the technologies mature—it’s possible to get closer to the model of the finance function that will exist in 2025. Yes, finance will likely be leaner, but that will mostly be a function of headcount in operational finance (order-to-cash, procure-to-pay, transactional accounting, etc.). Yes, finance will likely be leaner, but that will mostly be a function of headcount in operational finance (order-to-cash, procure-to-pay, transactional accounting, etc.). Ten years ago KPMG in the UK made a series of predictions on the future of finance in 2010. Finance isn’t often known for its dynamic, fail-fast culture, so CFOs need to reset expectations. Gartner, Inc. has identified the top 10 trends that will be critical to the success of CFOs. Special thanks for Josh Hyatt, manager/journalist CFO Program, Deloitte LLP, for his contributions to this edition. But the traditional finance function … How will the finance function’s operating model change between now and 2025; will the change be an evolutionary or a revolutionary, i.e., the end of finance as we know it? Share your vision and help create alternative models for the future look of the finance function. Emerging technologies can often appear to be maturing at the same rate, threatening to overwhelm finance leaders. The finance function of the future will need a balance of both technical and business skills. 77% of senior finance professionals believe the finance function will consist of fewer but more highly skilled members. Finance 2020: Designing a Finance function to meet new demands 1. Finance, once reconfigured, will need to reevaluate how and where work gets done, considering alternative talent models and looking for opportunities to integrate robotic systems into the workforce. Financial Education & Research Foundation today. While digital technology has just begun to exert its impact on performance, forward-looking CFOs can already envision the potential payoff in implementing automation, embedding sophisticated analytics, and exploring new technologies such as blockchain and machine learning—a payoff that extends far beyond just cost savings. © 2020. It’s more important than ever to understand the Faster, better decisions. has been saved, Finance 2025. CFOs are under increasing pressure to provide strategic insights that enable leadership and boards to make better, more informed decisions. The trade-off between cost reduction and increased effectiveness of the finance function is a false choice. With that short preamble, here are eight predictions for Finance 2025. Deloitte Consulting LLP, Anton Sher Discover Deloitte and learn more about our people and culture. The ongoing standardization and automation of processes and transactions lends itself to centralization, but a range of options across the centralization spectrum serve different objectives. Social login not available on Microsoft Edge browser at this time. Principal Our predictions 5 1 3 2 4 8 6 7 5 When it comes to the field of Finance, we consider it our job to anticipate how ... likely be leaner, but that will mostly be a function of headcount in Operational Finance … According to the survey, majority of the people believe that finance functions … More than half of CFOs say their companies’ risk, regulatory … As the drumbeat of digital transformation grows louder, CFOs are stepping up to serve as designers of the future finance function. Accepting the need to adapt is the easy part of the challenge, however. That’s the future of finance. The following explanation will help in understanding each finance function in detail. Finance might choose to allocate resources based on the company’s most valuable competitive differentiators. US & Global Finance Transformation leader Investment Decision. finance function. Meanwhile, expectations for support … Learn seven scenarios that could impact the role of the finance function… For every unfamiliar “blockchain” and “chatbot” technology, the finance function of 2025 will also be characterized by familiar concepts that have undergone dramatic changes: Enterprise resource planning (ERP). Today, technologies like automation, blockchain, and artificial intelligence are already working their way into finance, upending how work gets done and who’s doing it. In fact, in Deloitte’s third-quarter 2018 CFO Signals™ survey, almost two-thirds of CFOs (63 percent) said that the time allocation of the finance workforce in three years will likely shift toward analysis, prediction, and decision support.1. When thinking about how finance might evolve over the next several years, it can get tricky. The ideal technology roadmap should balance the need to address existing gaps with that of achieving maximum return on investment. CFOs don’t need to fully grasp 2025 to prepare themselves—and their functions—for it. Supported by ever-richer data sets and increasingly sophisticated analytical tools, finance leaders of the future will have to develop new capabilities—in themselves and in others—to navigate the function through a fast-paced, technology-driven environment where strategy and growth consistently remain moving targets. In short, it’s up to CFOs to help their organizations see the possibilities. Finance function itself, and CFOs in particular, may need to adapt to a future where organisation’s increasingly focus on connectivity, interaction across business units and transactional synergies to … Applying such a mindset means that there are some future-oriented questions that can be addressed now, such as: Will any of these technological breakthroughs happen sooner than others? Global Business Intelligence Market to 2025 by Component (Solutions and Services), Solution (Dashboards and Scorecards, Data Integration and ETL), Business Function (Finance, … Any vision of the future, after all, should be grounded in a deep understanding of the present. By weighing the potential and power in mixing such foundational technologies to drive value—with ever-increasing efficiency, as the technologies mature—it’s possible to get closer to the … © 2020 Financial Executives International, 89 Headquarters Plaza | Suite 1462 Anticipating a slowdown (but not a recession). The number-crunching recorders of historical data weren’t built for an era where finance leaders have access to real-time data, along with the technology than can turn that voluminous data into actionable insights. RETHINKING THE ROLE AND DESIGN OF THE FINANCE FUNCTIONFINANCE2020 2. As CFOs consider how to prepare for the likely changes that 2025 will bring, they might also reconsider their own roles. It’s now a given that, in the future, a certain type of CFO will be history. How should CFOs prioritize? More agility and collaboration. Principal See Terms of Use for more information. It’s also crucial to weigh whether finance has the capabilities—such as access to the necessary skills—to capture full value from an investment. Advancing success through information, community and advocacy since 1931. As owners of the budgeting process and decision-makers in determining asset allocation, it’s up to CFOs to devise and promote the route to digital transformation that best suits the business. the finance function of today is much more than the “beancounter” of the past. Telecommunications, Media & Entertainment, Calling for change: A Fortune 50 CFO wants to get to the future faster, a recent survey of IT and line-of-business executives, an FP&A executive will be able to pose queries to a chatbot, https://www2.deloitte.com/content/dam/Deloitte/us/Documents/finance/us-cfo-signals-3q18-full-report.pdf, https://www2.deloitte.com/content/dam/Deloitte/us/Documents/finance-transformation/us-ft-crunch-time-V-finance-2025.pdf, https://www2.deloitte.com/content/dam/insights/us/articles/4780_State-of-AI-in-the-enterprise/DI_State-of-AI-in-the-enterprise-2nd-ed.pdf. Today, processes in the finance function are purposefully designed to harness the collective brain power and knowledge of many people. For example, digital technology promises to free up capacity, enabling finance to become more integrated with the business—and leading the business to increase its expectations for finance. And in this issue of CFO Insights, we’ll discuss what research reveals about the finance function of 2025,2 the strides finance leaders can take to add maximum value in an emerging digital world, and why CFOs should be energized by the journey ahead. Get industry trends and policy breakdowns delivered each day. US Finance and Enterprise Performance—Finance in a Digital World™ leader Today, finance functions have to look at … “Digital transformation” serves as handy shorthand, but it doesn’t fully describe the series of experiences embedded in the process. One of the most important finance functions is to intelligently allocate capital to long term assets. They may want to identify pockets where digital technology can produce near-term results while also evaluating investments that will help create a broader ecosystem to support long-term transformation. In order for finance/treasury departments in mid-sized businesses to move to the heart of innovation in the company, the Treasury 2025 report advises them to change perceptions and build … What’s the opportunity cost of ignoring all the talk about chatbots? Steven Ehrenhalt is Principal, US and Global Finance Transformation leader, Deloitte Consulting LLP. A host of megatrends—all of them familiar to finance executives to one degree or another—are driving digital strategy: For CFOs, it’s crucial to think through, step-by-step, how “digital transformation” will unfold—in regard to their companies and their own roles—and how finance can support the digital model that results from the convergence of these megatrends. On average, five functions other than finance now report to the CFO (Exhibit 1). The finance function cannot survive in the future as a support or back-office function. Then, by layering in an examination of digital technologies and how they’re being used in other areas of business – and in our personal lives – that helps you see opportunities for the future of the finance function. They need to ensure their teams are comfortable working in new roles, sometimes alongside robot co-workers. Follow on Twitter | Follow on Instagram, 2021 Predictions: Speed, Innovation and Technology Prepare Finance Teams for Whatever Comes Next, Smart Glasses: Technology Enhances Audit Quality, While Protecting Health and Safety. In this issue of CFO Insights, we’ll discuss what research reveals about the finance function of 2025, the strides finance leaders can take to add maximum value in an emerging digital world, and why CFOs should be energized by the challenges ahead. Taking action against systemic bias, racism, and unequal treatment, Key opportunities, trends, and challenges, Go straight to smart with daily updates on your mobile device, See what's happening this week and the impact on your business. Access networking, education, and career development opportunities. What are the implications for investments? But by starting with a disciplined look at what’s already happening in leading finance organizations, you get a view of some obvious trends. The managerial challenges of enabling digital transformation can be invigorating, as CFOs apply their new skills—ranging from technical knowledge to strategic thinking—to move beyond serving as the company’s devoted tracker of numbers. That of achieving maximum return on investment based on the future of finance in 2010 appear to maturing. Often appear to be maturing at the same rate, threatening to overwhelm finance leaders functions. 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